Heineken sees flat profit as Europe stays weak

AMSTERDAM--Dutch brewer Heineken NV (HEIA.AE) said Wednesday it still expects profit before exceptionals in 2012 to be broadly in line with last year as higher volumes in emerging markets and the Americas outweighed a weak European performance.

The world's third-largest brewer maintained its full-year outlook for profit before exceptional items and amortization to stay flat at 1.43 billion euros ($1.86 billion) with no sign of a revival in its troubled Western European market, which accounts for around 35% of the business.

Net profit for the three months to September rose 10% to EUR577 million from EUR525 million a year earlier. Third-quarter revenue rose 7.1% to EUR4.97 billion. Organically, the growth was 4%. Third-quarter operating profit increased by mid-single digits percentage points as it benefited from higher revenue and cost savings, but was partly offset by investments in expanding capacity and by increased input costs.

Heineken, like its rivals Carlsberg A/S (CARL-A.KO) and Anheuser-Busch InBev AB (ABI.BT), has been suffering in Europe from lower consumer spending due to higher unemployment and a shift away from mainstream beer in favor of premium spirits. Beer volume in Western Europe therefore declined by 2.1%, especially due to cautious consumers in the UK, Netherlands and Spain.

In the U.S., where Heineken's namesake iconic brand and its Dos Equis beer are fighting to steal market share from AB InBev's Corona brand, volume was up, Heineken said without specifying. For the region Americas, which includes the U.S., volumes increased by 4.4%. Heineken has been trying to boost its sales in the U.S. through marketing initiatives such as launching a new bottle for its Heineken brand to increase brand awareness.

Asia continued to be the best-performing region with volume growth of 4.8%. Heineken is set to benefit further from the fast-growing Asian market when it takes full control of Asia Pacific Breweries (A46.SG) from its joint venture partner Fraser & Neave (F99.SG) in a deal set to close in mid November.

The world's largest brewer AB InBev is due to report third-quarter results Oct. 31.

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